MONEY Tech

Lots of Apple Watch Listings on eBay Are Attracting Zero Bids

Apple Watch
David Paul Morris—Bloomberg via Getty Images

Sellers are asking extremely high "Buy It Now" prices at eBay to take advantage of strong demand for Apple Watches. But in many cases, consumers aren't biting.

By most accounts, the Apple Watch did a terrific business on the first day customers could place preorders. Apple reportedly received roughly one million orders last Friday, and demand has been so high that orders placed now won’t be delivered until June or even later in the summer.

The first customers who preordered Apple Watches, however, will have their shiny gadgets in hand starting on April 24 or soon thereafter. Part of the draw of being an early adopter is the opportunity to get one’s hands on the newest tech before everyone else, and a certain group of consumers is sure to be too impatient to wait until summer to get their hands on the new Apple Watch.

Naturally, this combination of strong demand and limited short-term supply led Apple Watches to begin appearing for resale on eBay almost as soon as Apple started accepting preorders. As ReCode noted over the weekend, most eBay listings for Apple Watches were of the “Buy It Now” variety, in which sellers post a flat price for the item rather than putting it up for an online auction. We probably shouldn’t be surprised that some sellers appear to be exceptionally opportunistic and greedy, occasionally posting “Buy It Now” prices that are 200% to 600% higher than retail.

Mind you, anyone can place an order and pay the retail price at the Apple Store for these exact same watches; the only reason anyone would pay a premium for an Apple Watch via eBay is that—assuming the listing is legitimate—you’d be able to show it off a few weeks sooner.

OK, so people selling stuff online are trying to make a quick buck by taking advantage of impatient Apple fans: Nothing new here. Are people actually paying up?

In some cases, they are indeed, but often not to the extent that sellers might hope. In one eBay auction that closed on Monday, a 42 mm Stainless Steel Apple Watch with link bracelet that retails for $999 was purchased for $1,400. Another Apple Watch, a 38 mm with a Black Sport Band, received 20 bids and sold for $561, barely over the retail price ($549). The results of some of the online auctions ending on Monday were puzzling: In one auction for a 38 mm Stainless Steel with Black Classic Buckle Apple Watch, the final bid was $610 (original price: $649), while a 42 mm version of the same Apple Watch (original price: $699) went for $910 in an auction that ended at almost the exact same time on Monday afternoon. Yet another Apple Watch auction that ended Monday, for a 38 mm model that retails for $349, wound up selling for $480.

It’s hard to draw many conclusions about the height of Apple Watch demand and the state of consumer patience from such all-over-the-map results. One thing that’s particularly interesting is that dozens of listings with “Buy It Now” prices and many with side-by-side “Buy It Now” prices and high starting bid prices came and went on Monday after attracting no bids whatsoever. For instance, no one bid on a 42 mm Milanese Loop Apple Watch listed at a “Buy It Now” price of $1,499, which shouldn’t be surprising considering the gadget can be purchased at retail for just $699.

Obviously, some sellers are trying to test the market with the hopes of making as large a profit as possible on their timely device purchase. In general, buyers are paying only moderate premiums in Apple Watch resales. For now at least, it looks like consumers aren’t going completely overboard in the quest to slide an Apple Watch onto their wrists a few days before their neighbors and coworkers.

MONEY Taxes

You’re Not Paying Enough in Taxes on These 7 Things

junk food (candy, soda and chips)
iStock

That's what proponents of various tax hikes, or entirely new taxes, would have you believe.

The last thing most consumers want to hear—especially around April 15—is that they should be paying more in taxes. But for a wide range of reasons, including health, safety, fairness, the environment, and simply raising more funds for government projects and infrastructure, some say higher taxes are needed in the following categories.

Alcohol
“In 1951, the federal excise tax on a standard shot of 80-proof whiskey was about 90 cents in today’s dollars. Today it stands at about 13 cents, a seven-fold decrease,” the Washington Post noted recently. “The real federal beer tax has fallen about fivefold over the same period, with a more modest drop for wine.”

That and other articles point to new research from the University of Florida, which shows that higher alcohol taxes can save lives—because people drink less when booze costs more. “Alcohol tax increases implemented across the country could prevent thousands of deaths from car crashes each year,” said Alexander C. Wagenaar, a UF College of Medicine professor and one of the researchers involved in the study.

Junk Food
Commonly referred as a junk food tax, the Healthy Dine Nation Act went into effect on April 1 in the Navajo Nation, which extends into parts of Arizona, Utah, and New Mexico. The law adds a 2% tax on chips, fried foods, soda and other sweetened beverages, and other products with “minimal-to-no-nutritional value.” Funds raised from the tax are supposed to be allocated to health initiatives, including exercise facilities and community gardens. The tax is also aimed at dissuading people from eating poorly—diabetes, hypertension, and cardiovascular disease are all big problems on the reservation.

The idea of a state or national junk food or “fat tax” surfaces from time to time, with proponents calling special attention to how costly obesity is. “America spends $96 billion treating diseases caused by cigarette smoking—far less than the $190 billion spent on obesity,” the Committee for Economic Development noted last fall. Yet some research indicates that to be noticeably effective in changing consumer behavior, a junk food tax has to be big, perhaps 20% or higher.

Soda
While a blanket junk food tax would include soda and sweetened beverages, some health advocates specifically target soda as especially appropriate for a new tax. The nation’s first soda tax was passed in Berkeley, Calif., last fall, and lawmakers in San Francisco have been trying to reduce soda consumption, via possible taxes and package warnings among other measures. Several other cities have tried (but failed) to institute soda taxes, and we’ll have to wait and see if Berkeley is a trendsetter or an oddball anomaly. One 2014 study suggests that a tax equivalent to 6¢ on each 12-ounce soda would significantly curb soda consumption.

Gas
The idea of hiking gas taxes has grown more popular since gas prices collapsed in the U.S. The national gas tax hasn’t budged since 1993, and the thinking is that people will be more open to higher gas taxes at a time when the cost of gas is cheap. Forecasts call for gas prices to stay low indefinitely, and that makes it more likely that a gas tax increase will happen.

Driving
One problem with taxing gas is that today’s drivers use less of it, thanks to the rise of alternative-fuel cars and across-the-board improvements in fuel efficiency. After all, when people use less gas, they pay less in gas taxes too, and plummeting gas taxes collected means that there are fewer funds to keep our highway infrastructure from crumbling further.

One frequently suggested alternative to taxing gas is taxing miles driven. This concept is riddled with unknowns, but we should all know more about how such a system would work in the near future. An experiment charging a few thousand drivers 1.5¢ per mile gets under way in Oregon starting this summer.

E-cigarettes
According to a 2015 Pew Charitable Trusts study, two states already tax e-cigarette sales (North Carolina and Minnesota), and proposals to add e-cigarette taxes have been on the table in at least a dozen more states. Among them, Ohio is considering a tax that would effectively triple the current cost of electronic cigarettes.

Online Shopping
Last month, a group of U.S. senators introduced a new version of the Marketplace Fairness Act, which would allow states to collect sales tax on purchases made in other states. Somewhere between one-half and three-quarters of American consumers already pay sales tax on Amazon.com purchases, but there are many examples of online purchases that still aren’t taxed.

“The free ride,” as a recent Pittsburgh Post-Gazette editorial called it, “comes at a cost: a decline in tax revenue, with a corresponding decline in government service, and a system that unfairly favors online retailing behemoths at the expense of brick-and-mortar stores close to home.”

MONEY Tech

5 Questions That Will Determine If You’ll Buy an Apple Watch

150409_EM_ToBuyNotToBuy
Robert Galbraith—Reuters Apple Watches

Preorders for the new Apple Watch can be placed starting on Friday, April 10. But just because you can buy one doesn't mean you should buy one.

Starting this Friday, customers can place preorders for the Apple Watch, the first entirely new product from Apple since the iPad. Analysts are predicting that Apple will sell somewhere between 8 million and 41 million Apple Watches—not just on Friday, mind you, but for all of 2015. Should you be one of these buyers? To answer that, you should first address the five questions below.

Is it just too bulky and ugly to wear? There’s a fair amount of skepticism that many people—women in particular—will voluntarily place a mini-computer on their wrists and walk around in public. Allen Adamson, chairman of the branding firm Landor Associates, told the San Jose Mercury News that Apple Watch owners will be overwhelmingly male because the gadget, while smaller than most smartwatches, is too big and bulky for women’s wrists (and tastes). “If it didn’t skew 70-30, I’d be surprised,” he said.

Gawker called the Apple Watch the company’s “dorkiest luxury item yet,” and circulated a very Gawker-y idea that everyone should take a pledge to refuse to have sexual intercourse with anyone wearing (or even owning) said gadget.

Others had more kind things to say about the Apple Watch as a fashion accessory. Joshua Topolsky of Bloomberg described the Apple Watch as “beautiful in a surgical way,” which is not the same as saying something’s simply beautiful: “Apple’s design doesn’t compete with Rolex, Omega, or Breitling for sheer style, but the more I wore the inconspicuous thing, the more I liked it on my wrist.”

In her review, the Wall Street Journal’s Joanna Stern called the Apple Watch “a status symbol, a sign of wealth and taste,” as well as “an accessory I love to wear all day long.”

Will it help you focus? Or be one more distraction? “Do I really need another connected screen blinking, beeping and buzzing all day?” That question, asked in another Wall Street Journal review (by Geoffrey A. Fowler), is one that people have been asking since the advent of smartwatches. Theoretically, some of the appeal of the Apple Watch is that it will free us from the compulsion to eyeball our iPhones every 30 seconds. But because the Apple Watch must be in close proximity to the user’s iPhone to be fully functional, Apple is effectively now trying to convince us all that we must walk around with not one but two mini-computers on our person at all times.

This seems like overkill, if not plain insanity. And yet, even if the Apple Watch is not a substitute for a smartphone, most reviewers noted that they turned to their iPhones less frequently while they were wearing Apple Watches. Having the watch on Fowler’s wrist “has made me more present,” he wrote. “I’m less likely to absent-mindedly reach for my phone, or feel compelled to leave it on the table during supper.”

On the other hand, Topolsky’s review begins by focusing on how the Apple Watch interrupted his day dozens of times, typically with useless messages that aren’t quite as easy to ignore as tweets and emails because they’re coming from a vibrating device on your wrist. If part of the pitch is that the Apple Watch will “help me stay in the moment, focused on the people around me,” Topolsky wonders, “why do I suddenly feel so distracted?”

Would you really use it to pay for stuff? For the most part, reviewers say that the ability to make purchases with the Apple Watch (via Apple Pay) is one of the gadget’s strengths. “Apple Pay on the watch is even easier to use to buy stuff at retail then on the iPhone,” wrote Edward C. Baig, tech columnist for USA Today. “Once you’ve set up the cards you’ll use, double-tap the side button when you’re about to pay. You’ll see the default credit card you selected (and can swipe to any other cards you’d rather use). Hold the phone next to the terminal, and if all goes as expected the transaction will almost immediately go through, as it did in my tests at McDonald’s and Whole Foods.”

In his expansive (and mixed) review, Nilay Patel of The Verge called Apple Pay “my favorite part of the entire Watch, a little blast from the future.” He too noted that paying via Apple Watch is “even faster than paying with an iPhone, since it doesn’t have to read your fingerprint; it’s ready to go anytime after you put it on your wrist and unlock your phone with your fingerprint. I love using Apple Pay with my phone, but it’s even better with the Watch, some mild contortions to line it up with payment terminals aside.”

But just because Apple Pay via Apple Watch is better than Apple Pay via smartphone doesn’t mean that it’s more practical than paying with plain old cash, credit, or debit. A recent report from Phoenix Marketing International showed that tons of iPhone owners have run into hassles when attempting to use Apple Pay: Two-thirds reported problems at checkout, 47% have tried but were unable to use it in stores listed as Apple merchants, and nearly half say they used Apple Pay once and never again.

Is it just too new, with too many bugs? Every early adopter should know that the tradeoffs for being on the cutting edge include the risk that the new tech is mostly hype (see: 3-D TV), doomed to failure (Fisker Karma), or simply riddled with hiccups (nearly every 1.0 gadget). In his review for the New York Times, Farhad Manjoo reported that the Apple Watch “works like a first-generation device, with all the limitations and flaws you’d expect of brand-new technology.” Among other issues, Manjoo noted, “third-party apps are mostly useless right now.” Ultimately, he came away falling in love with the gadget, but only after “three long, often confusing and frustrating days,” which is probably not the endorsement Apple was hoping for.

Over at The Verge, Patel cut to the chase and declared the Apple Watch “kind of slow,” with glitches galore:

There’s no getting around it, no way to talk about all of its interface ideas and obvious potential and hints of genius without noting that sometimes it stutters loading notifications. Sometimes pulling location information and data from your iPhone over Bluetooth and Wi-Fi takes a long time. Sometimes apps take forever to load, and sometimes third-party apps never really load at all. Sometimes it’s just unresponsive for a few seconds while it thinks and then it comes back.

Apple will surely address these and other issues encountered by early Watch buyers. In the meantime, early adopters should remain patient, and expect periodic (hopefully not chronic) problems. The easy alternative is to simply wait for Apple to increase the battery life, tweak the software and design, and otherwise smooth things out with the inevitable second version of the Apple Watch.

Is what you get worth the price? This is the question at the heart of every purchase decision, isn’t it? The Watch starts at $349 and can go over $10,000. You’ll have to decide for yourself if any amount in that window represents money well spent. The “Bottom Line” from CNET sums up the consensus take: “The Apple Watch is the most ambitious, well-constructed smartwatch ever seen, but first-gen shortfalls make it feel more like a fashionable toy than a necessary tool.”

Few people will argue convincingly that you truly need an Apple Watch, though many of us will surely want one, even though its true utility may still be something of a mystery at this point. Pre-orders can be placed starting at 12:01 on Friday, April 10, via the Apple Store.

MONEY shoes

The 107-Year-Old Hipster Sneaker That’s Saving Nike

Red converse sneakers
Jens Mortensen—Gallery Stock

Chuck Taylor would be proud.

When Nike Inc NIKE INC. NKE 0.18% announced mixed quarterly results two weeks ago, I suggested at the time that investors were right to celebrate. Even though Nike’s 7% revenue growth missed expectations thanks to foreign currency headwinds, shares of the footwear and athletic apparel behemoth climbed more than 4% to a new all-time high that day.

Excluding the effects of foreign exchange, however, Nike’s revenue would have climbed 13%, including 11% growth in Nike brand revenue to $6.9 billion. Nike also exceeded estimates for earnings, which grew 19% to $0.89 per share.

But the fact that Nike’s overall growth outpaced that of its namesake brand indicates that it had another smaller, faster-growing source of revenue to make up for the difference — a secret weapon, perhaps, operating under the radar and bolstering the rest of the business.

Chuck Taylor for the win

For that, look no further than Nike subsidiary Converse, sales from which grew an impressive 28% (33% excluding currencies) last quarter to $538 million. For perspective on that growth, Nike acquired Converse for just $305 million back in July 2003, when the smaller brand had annual sales of just $205 million.

So after nearly 12 years under Nike’s wing, why is growth at Converse accelerating now?

According to Nike CFO Don Blair in the company’s follow-up conference call, Converse’s performance was “boosted by the acceleration of Q4 shipments in advance of a major systems go live.” Meanwhile, Blair elaborated, “The balance of the growth was driven by continued strength in North America, the conversion of several European markets to direct distribution, and strong growth in [direct-to-consumer].”

That’s fair enough. After all, three months earlier, Blair cited similar factors as driving Converse’s 21% growth in the previous quarter. And at the same time, he noted that Converse’s earnings before interest and taxes fell 12% because of “investments infrastructure, demand creation, and DTC to enable long-term growth.” It would appear, then, that we’re beginning to see the fruits of those investments.

The legal factor

But we also shouldn’t forget the more difficult-to-measure impact of Nike’s decision to finally crack down on Chuck Taylor lookalikes last October. Specifically, that’s when Converse filed 22 separate trademark infringement lawsuits against 31 companies for their alleged illegal use of core design elements of Converse Chuck Taylor shoes.

To be fair, Nike tried to avoid the courts, saying it had served around 180 cease-and-desist letters to the defendants since 2008. But when nothing else stopped the accelerating flow of Chuck Taylor knockoffs into the market, the courts became Nike’s primary avenue for defending the iconic Converse brand.

As it turns out, the lawsuits are proving extremely effective so far. According to a report from Fashionista in February, Converse has already voluntarily dismissed a number of the cases after coming to agreements with prominent defendants including H&M, Tory Burch, Zulily, andRalph Lauren.

And while the exact terms weren’t disclosed, U.S. International Trade Commission documents a few weeks earlier confirmed that the ITC had found 36 Ralph Lauren shoe styles in violation of Converse trademarks. As a result, Ralph Lauren agreed not only to pay Converse monetary damages, but it also would be required to destroy all infringing shoes, as well as any associated molds, tools, and marketing material.

Of course, it’s hard to tell just how much of a positive effect this has had, especially since Converse was growing nicely before its legal actions. But if one thing seems sure, it’s that Converse is more popular than ever before. In the end, with its competition effectively neutralized and Nike piling cash into marketing, infrastructure, and direct-to-consumer channels, Converse appears poised to play an increasingly important role dictating the fortunes of Nike shareholders for the foreseeable future.

MONEY groceries

America’s Most Popular Supermarket Is Also Its Least Loved

Walmart, Miami, Florida
Joe Raedle—Getty Images Walmart, Miami, Florida

Walmart has both the highest sales and lowest consumer ratings among grocery shoppers. And this makes sense how?

More Americans buy their groceries at Walmart than anywhere else. It currently captures about 25% of the grocery market in the U.S., up from around 7% in 2002.

In other words, in a relatively short period of time, Walmart has transformed from an all-purpose retailer that happened to sell groceries into the country’s most popular destination for grocery shopping by far.

And yet, America’s “favorite” supermarket—at least in terms of where we spend the most money—also appears to offer the worst grocery shopping experience. The May 2015 issue of Consumer Reports features ratings and reviews of the nation’s leading grocery stores, and Walmart was at the absolute bottom of the heap.

The news shouldn’t come as a surprise. CR noted that Walmart has been among the lowest-rated grocers over the past decade; it was dead last in consumer ratings last year among a total of 55 supermarket brands. “This year,” the CR article stated, “the nation’s largest grocer—the primary shopping destination for 10 percent of those surveyed—earned low marks in every category other than price.”

That last word basically explains all you need to know about why people keep shopping for groceries at Walmart even though the quality and customer service are far superior at Wegmans, Publix, and Whole Foods—all of which are among the highest-rated supermarkets in the study. For a large portion of shoppers, price simply trumps all when it comes to groceries.

A Motley Fool post hit the nail on the head by pointing out that most shoppers “either take one approach to buying their groceries or another. Either they’re willing to pay a premium for high quality at a Publix or Whole Foods Market, or they’re looking for value and would prefer to shop at a Walmart.”

A sizable percentage of shoppers will cope with Walmart’s empty shelves, low-ranking produce variety and freshness, and overall dissatisfaction so long as the tradeoff is a cheaper grocery bill.

Still, it’s worth noting that the CR study that puts Walmart dead last among supermarkets is not the result of a random poll. Instead, it’s based on input from CR subscribers, who presumably pay more attention to what they buy than the average shopper. They’re probably more value-driven and wealthier too. (We’ve reached out to CR to verify this information and are waiting to hear back.) As mentioned above, only 10% of CR subscribers say they do most of their grocery shopping at Walmart, whereas 25% of overall grocery sales take place at the store. So the study is not necessarily representative of American consumer behavior, and it could very well be that regular Walmart grocery shoppers are happier with their experience—or simply care less—than the participants in the CR survey.

Another explanation for why Walmart grocery sales are so high while shopper satisfaction is in the basement just comes down to the fact that no matter where you live, there’s probably a Walmart nearby. As a National Retail Federation study noted, “With the exception of Walmart, no grocery chain is truly a national presence, though Whole Foods Market, Trader Joe’s and Aldi seem to be pointed in that direction.”

MONEY Advertising

The True Purpose of Heineken Light’s New Money-Back Guarantee

Heineken Light
Heineken

It's easy to make a promise when you're pretty sure no one will ever take you up on it.

Heineken Light just introduced quite an impressive-sounding guarantee, in which customers will get their money back if they think that it’s not the best-tasting light beer on the market.

The new guarantee is being promoted with a couple of commercials featuring Neil Patrick Harris. The humor in the one 15-second spot embedded below stems from the fact that Harris isn’t quite sure how anyone would actually get a refund.

“Not me, I won’t” give you your money back, the actor and Oscars host says in the commercial. “Someone will give you your…” he stammers and then stops, before clarifying, “someone at Heineken, I’m guessing,” while looking around bewildered. In other words, he has no clue how the money-back guarantee would work in real life. Ha!

If you’re interested, have a look at the ad yourself:

What’s funny in a different way about this commercial is that the ad brings to light how virtually no consumers understand the nitty-gritty of money-back guarantees—mainly because almost no one ever gets their money back from them.

It’s easy for Heineken to make this promise concerning its product, because people simply “won’t return the beer — too much hassle and humiliation,” Kit Yarrow, consumer psychologist and frequent Money.com contributor explained via email. “The whole point of the ad is to make a big statement about quality/taste — guarantees are one of the strongest possible ways to demonstrate confidence. Heineken cleverly reduced the ‘huckster’ quality of a money-back guarantee by adding a dribble of irony and self-mockery through Neil Patrick Harris’ delivery.”

Money-back guarantees have been around for decades. An old Journal of Retailing study succinctly sums up a few of the key reasons why stores and manufacturers roll them out, especially when it comes to newer, higher-end products:

Such a guarantee may increase a retailer’s profits. They may increase the sales volume by encouraging shoppers to try new products. In addition, they may allow the retailer to charge higher prices because the reduction in risk from the product’s being a poor match with their tastes may increase a consumer’s willingness to pay.

Overall, these guarantees tend to provide far more benefit to retailers than they do for consumers. They’re the “commercial equivalent of a date pulling out his or her wallet with no intention of paying,” as a colleague at Time.com once put it.

It’s not just retailers and product manufacturers that make use of money-back guarantees as a means to instill confidence and drum up business. A small Canadian newspaper just introduced a money-back guarantee for subscribers, while a pastor in Pennsylvania recently told his congregation that he’d be happy to give donations to the church back to anyone who doesn’t feel blessed.

“We’ve never had one person ask for their money back, which means that God is true to his word and that we’re seeing the blessings of God being poured out in people’s lives,” said the pastor, Robbie McLaughlin of Hope City Church in Harrisburg.

It’s hard to say how many people take companies up on their money-back guarantees because this information is rarely shared with the public, if it’s tracked at all. Walmart introduced a much-heralded fresh produce money-back guarantee in 2013. But as one retail insider noted, it’s somewhat of an empty promise, because the likelihood of anyone employing the guarantee for a refund is small: “How many customers are going to return to Walmart and stand in a customer service line to return a $3 produce item?”

Some money-back guarantees come with substantial fine print, as well as loopholes that can make it extra difficult to get your money back. For instance, a MousePrint.org study on the money-back guarantees highlighted how Federal Express’s promise was undercut by a line of fine print explaining the “guarantee can be suspended, modified or revoked at our sole discretion without prior notice to you.”

One of the best-known money-back guarantees comes from Hampton Hotels, which has had such a guarantee for more than a quarter-century, and which claims to have given away “millions of dollars in free room nights” over the years to guests who weren’t fully satisfied with their stays. Even with those refunds factored in, the company says the guarantee has been great for business. One reason is that most people with complaints “merely wanted the management to know about the problems,” according to a company press release celebrating the guarantee’s 25th anniversary, and they didn’t actually ask for their money back. Most importantly, the guarantee has served as “key driver of incremental business for the brand, with about 75 percent of all hotel guests aware of the offer and about half reporting that it has some influence on their hotel choice.”

MONEY credit cards

How Does Amazon’s New 5% Cash Back Card Measure Up?

Amazon Prime
Alamy

Amazon has a new store credit card that offers Amazon Prime members 5% back on qualifying purchases. But how does it compare to the competition?

Amazon and Synchrony Bank released a new credit card offer for Amazon Prime customers last week, offering 5% cash back on qualifying purchases and even promotional financing for orders over $149.

The store credit card is a credit product you may be familiar with at bricks-and-mortar retailers. Often, these cards offer a discount at sign-up, and promises of exclusive discounts or or coupons in the future. With the 5% cash-back offer on all purchases, is the new Prime card a good fit for frequent Amazon shoppers?

How This Card Works

Subscribers to Amazon’s Prime service are eligible to receive 5% cash back on qualifying Amazon.com purchases as a statement credit. Or, they can receive a variety of promotional finance offers. For example, cardholders will pay no interest on charges of $149 or more if the balance is paid in full within six months of purchase. Otherwise, the standard interest rate of 25.99% will apply. In addition, new applicants will receive an Amazon.com gift card loaded into their account instantly upon approval.

This card is offered by Synchrony Bank, and is not affiliated with any payment network, so it is only valid for purchases from Amazon. Applicants must be members of Amazon Prime, which costs $99 per year and includes free two-day shipping and access to their streaming video and music services. There is no annual fee for this card, but cardholders must be current Amazon Prime subscribers to receive the 5% discount or the promotional financing offers.

There are other store cards and credit cards that also allow you to save money on Amazon purchases. Here are a few offers so you can weigh your options.

Amazon.com Rewards Visa Card From Chase

Chase offers this card that earns 3% back for purchases from Amazon.com, 2% back at gas stations, restaurants and drugstores, and 1% back on all other purchases, and is accepted anywhere Visa is. New cardholders also receive a $30 Amazon.com gift card applied to their account at the time of approval. There is no annual fee for this card.

Sallie Mae MasterCard From Barclaycard

This card offers 5% cash back on the first $250 cardholders spend each month on gas and grocery purchases, and the first $750 spent each month on eligible book purchases. Interestingly, Amazon.com is coded as a book store, a legacy of their early origins as just a book retailer. Cardholders earn 1% cash back on all other purchases, and there is no annual fee for this card.

SimplyCash Business Card From American Express

Another strategy for getting discounts from Amazon purchases is to use Amazon gift cards, which can be purchased at some office supply stores. The SimplyCash Business Card from American Express offers 5% cash back for purchases at U.S. office supply stores and on wireless telephone services. It also features 3% cash back on a category of your choice including airlines, hotels, car rentals, gas stations, restaurants, advertising and shipping, and on all other purchases. There is no annual fee for this card.

Blue Cash Preferred Card From American Express

This card offers 6% cash back on up to $6,000 spent each year at U.S. supermarkets, which often sell gift cards for Amazon. In addition, this card offers 3% cash back for purchases from select U.S. department stores, and 1% cash back on all other purchases. There is a $75 annual fee for this card.

Before you apply for any credit card, it can be helpful to check your credit standing so you can target your search to credit cards that fall within your credit range. You can get two of your credit scores for free on Credit.com, and they’re updated every 30 days.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

More from Credit.com

This article originally appeared on Credit.com.

MONEY Shopping

Why Target Just Gave You a Year to Return Stuff

Exterior of Target store
Richard Clement—ZUMA Press, Inc./Alamy Humming again.

Target's newly generous return policy goes against industry trends, and it's inevitable that some shoppers will go overboard and abuse it. What is the company thinking?

Last week, Target announced it was extending the return policy on a wide range of merchandise to 365 days, a huge increase compared with the old 90-day return allowance.

The new policy doesn’t apply to all goods purchased at Target. Instead, the one-year window is valid on all 32 Target “owned and exclusive brands”—the stuff you can buy only at Target—including merchandise sold under names such as Archer Foods, C9 Champion, Cherokee, Liz Lange, Mossimo, Nate Berkus, Shaun White, and Wine Cube. The return policy for all items purchased as part of a Target gift registry (for babies, weddings, and such) has also been extended from 90 days to 365 days. And the liberal return period allowance for registry items commences on the day of the event, not the date of purchase.

While certainly more generous compared with most of its competitors, Target’s new return policy is not completely unheard of. “It’s a bit reminiscent of Costco’s liberal return policy,” Edgar Dworsky, a consumer advocate and the founder of Consumerworld.org, which publishes an annual retailer return policy report, said to the Minneapolis Star Tribune. “It certainly is an unusual move.”

Unusual indeed. During the same week that Target was rolling out its easier-than-ever return policy, Bed Bath & Beyond was following industry trends by making its policy less customer-friendly. As Consumerist.com noted, in the past Bed Bath & Beyond allowed all items purchased at the store to be returned for store credit or a direct exchange indefinitely, with or without a receipt—a “policy that most customers enjoyed and a few abused.” Now, however, when customers bring back items without a receipt, they’ll still be able to get store credit, but there will be a 20% deduction on the amount they receive.

[UPDATE/CORRECTION: Bed Bath & Beyond reached out to us to clarify that its new return policy takes effect on April 20, 2015, and that it “will only affect customers whose purchase cannot be located to process a return, either because the receipt was not provided or because we could not identify the purchase through a query of our transaction records.”]

In recent years, other retailers once renowned for incredibly generous return policies have felt forced to tighten up restrictions due to the abuse by a small percentage of customers. For instance, Bloomingdale’s and REI have ratcheted up return policies, partly because of the extreme behavior of a few rotten shoppers. Some people had the gall to return counterfeit goods purchased on the black market overseas to REI, while others referred to the retailer as “Rental Equipment Inc.” because they used backpacks, tents, and other gear for years and turned them in for new models once they were worn out.

Retailers say they’ve also been compelled to tweak return policies because of a certain subspecies of “returnaholic” shoppers known for engaging in the practice of “wardrobing.” This is the name when you buy something—typically clothing or accessories—wear it to some special event while hiding the fact that the price tag is still attached, and then return it afterward.

At a discussion of Target’s new return policy over at the industry publication Retail Wire, one retail insider noted that the company was all but asking for “wardrobing” and other kinds of abuse to take place:

I expect Target will get flooded with returns as a result of this policy—especially by Millennials who want to rent rather than own. Upscale retailers have had to limit the returns of expensive dresses because women would wear them for one night and return them using the store’s liberal return policy.

So what’s behind Target’s change to a more flexible, potentially abused return policy? The short answer is that shoppers buy more stuff when they know returns are easy.

“People are more likely to purchase impulsively with the assurance of a liberal return policy,” says consumer psychologist Kit Yarrow, author of Decoding the New Consumer Mind and a frequent contributor to Money.com. “In stores like Target, impulse purchases are essential to their financial health.”

In the past, Yarrow has explained that a good return policy is critical when a retailer is trying to foster a long-lasting, trusting relationship with the customer. “Psychologically, a liberal return policy unconsciously communicates confidence in the products being sold,” she says. “With trust in businesses at abysmal levels, this is key.”

It’s been a long time since Target was known as “Tarjhay,” the “cheap chic” darling of the industry. By pushing the return policy to new levels of flexibility and generosity, Target is also pushing its reputation upscale. “Better return policies will help to elevate and classy-up the brand image–which is now more on par with Walmart whereas once it was edging up toward Macy’s,” says Yarrow.

Yarrow also points out that the retail experience today is riddled with potential headaches, so one easy way to set your company apart from the pack is by removing annoyances. “Retailers are typically focused on adding positives–what consumers really want is fewer negatives,” she says. “Hassle reduction is the new route to consumer happiness.”

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